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Monty, Inc. had net sales in 2020 of $1,429,400. At December 31, 2020, before adjusting entries, the balances in selected accounts were Accounts Receivable $237,400 debit, and Allowance for Doubtful Accounts $1,859 debit. Assume that 10% of accounts receivable will prove to be uncollectible. Prepare the entry to record bad debt expense

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Answer:

Dr Bad debt expense $25,599

Cr Allowance doubtful acc $25,599

Explanation:

Preparation of the appropriate journal entry to record bad debt expense

Dec 31, 2020

Dr Bad debt expense $25,599

Cr Allowance doubtful acc $25,599

(To record bad debt Expense)

$237,400 * 10% = $23,740

$23,740 + $1,859 = $25,599

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